New Taiwan–Paraguay Deal Strengthens Article 6 Cooperation

Taiwan and Paraguay have joined forces to boost cooperation on carbon credit trading under Article 6 of the Paris Agreement, marking a new step in their shared mission to meet international sustainability goals.

Lush Paraguayan rainforest with waterfalls, tropical birds, and morning mist under the sunrise. AI generated picture.

The deal was formalised on 1 October in Taipei, where Taiwan’s Foreign Minister Peng Chi-ming and Paraguay’s Environment Minister Rolando de Barros Barreto signed a memorandum of understanding (MoU) titled the Carbon Credit Cooperation Memorandum.

According to Taiwan’s Ministry of Foreign Affairs, the initiative aims to ‘work together to achieve net-zero emissions and promote a green economy.’ It outlines joint efforts in areas such as carbon market regulation, governance, professional training, and capacity building. The ministry added that the collaboration will ‘accelerate the realisation of a win-win situation of economic prosperity and environmental sustainability.’

Although the agreement leaves specific project details—like locations, credit volumes, and timeframes—undisclosed, previous cooperation between the two nations offers some direction. Taiwanese companies are expected to act as carbon credit buyers, while Paraguay will likely host the emission reduction projects.

In fact, the Taiwan Carbon Exchange approved an afforestation project in Paraguay back in July 2024, allowing it to supply carbon credits to Taiwanese firms preparing for future carbon tax obligations. Taiwan’s upcoming carbon fee system—set to launch in May 2026—will apply to manufacturers and power producers emitting more than 25,000 tonnes of CO₂ per year. These companies will be able to use voluntary carbon credits to offset up to 10% of their emissions.

For Paraguay, the partnership is another step toward deeper involvement in global carbon markets. In August, the country also signed an MoU with US-based carbon standard Verra to advance carbon project development and strengthen its international trading capacity.

As countries build new alliances to meet climate goals, collaborations like this highlight the growing role of transparent, high-integrity carbon markets in driving real environmental progress.